Business Optimization

(CLP) Programs

Appleton Greene corporate training programs are all process-driven. They are used as vehicles to implement tangible business processes within clients’ organizations, together with training, support and facilitation during the use of these processes. Corporate training programs are therefore implemented over a sustainable period of time, that is to say, between 1 year (incorporating 12 monthly workshops), and 4 years (incorporating 48 monthly workshops). Your program information guide will specify how long each program takes to complete. Each monthly workshop takes 6 hours to implement and can be undertaken either on the client’s premises, an Appleton Greene serviced office, or online via the internet. This enables clients to implement each part of their business process, before moving onto the next stage of the program and enables employees to plan their study time around their current work commitments. The result is far greater program benefit, over a more sustainable period of time and a significantly improved return on investment.

Appleton Greene uses standard and bespoke corporate training programs as vessels to transfer business process improvement knowledge into the heart of our clients’ organizations. Each individual program focuses upon the implementation of a specific business process, which enables clients to easily quantify their return on investment. There are hundreds of established Appleton Greene corporate training products now available to clients within customer services, e-business, finance, globalization, human resources, information technology, legal, management, marketing and production. It does not matter whether a client’s employees are located within one office, or an unlimited number of international offices, we can still bring them together to learn and implement specific business processes collectively. Our approach to global localization enables us to provide clients with a truly international service with that all important personal touch. Appleton Greene corporate training programs can be provided virtually or locally and they are all unique in that they individually focus upon a specific business function. All (CLP) programs are implemented over a sustainable period of time, usually between 1-4 years, incorporating 12-48 monthly workshops and professional support is consistently provided during this time by qualified learning providers and where appropriate, by Accredited Consultants.

---

Executive Summary

Business Optimization – History

In 2009 Mr. Erickson, developed a business consulting process to help owners of small and medium sized businesses improve the performance and ease of operations of their companies. This process evolved into the Business Optimization Process (BOP).

His consulting services initially focused on helping these owners learn how to better operate their businesses by applying sound business principles to their sales, operations, distribution, and financial management areas. Mr. Erickson’s knowledge and experience came from years of working in various technical, managerial and executive positions in large and medium sized corporations. He felt the best way to effectively improve business performance was to integrate the concepts of Systems Theory and Thinking, the Theory of Constraints, and Transformational Leadership into a comprehensive management process.

Systems Theory and Thinking apply to the way any organization operates. Organizations are systems and thus are influenced by certain laws, characteristics and principles. Change becomes easier when these laws, characteristics and principles are understood as they apply to a given organization. The Theory of Constraints applies to any organization and, in a nutshell, says that the throughput or performance of any organization is limited by a single constraining point. Finding and correcting this constraining point immediately improves a company’s throughput capacity and thus its performance. Transformational Leadership is a style of leadership that effectively creates focus throughout an organization by having a clear vision of what needs to be accomplished. This vision is the driver behind the leadership efforts and is effective at motivating the people throughout the organization to accomplish the improvements needed.

As his client base grew Mr. Erickson began to expand his approach to the way his company provided consulting services. The approach evolved into a four phase business improvement model (“Model”) where all phases are interrelated and interconnected. These phases were specifically developed to help owners create the improvements needed in their business so they would have the freedom to do what they would want with their business. The Model guided business owners in effectively improving their business from how their business was currently operating to how it needed to operate in order to meet the owner’s goals.

The first phase of the Model was the Planning phase. This phase included a combination of Ownership Planning and Business Planning. The philosophy of the Model is that a business is basically one of several tools an owner chose to help them achieve their personal goals. Therefore, business planning was driven by the results of ownership planning. Ownership planning was the owner assessing what they want from life and how their business fits into their wants.

Planning led to the second phase, which was Optimization. During this phase the flow of work through the sales, operations, distribution, and financial areas of the company was first balanced and then systematically increased to improve the capacity, throughput and profitability of the company. This phase included improving operating processes and philosophies as well as applying cash management principles to the financial management practices so that targeted cash flow was realized from these profits.

The third phase was Building Value, which has to do with building sustainable and growing business value. This phase included developing managerial depth and processes, and implementing business communication tools that allowed those within the business to know what was expected of them and to give them feedback on the results of their efforts. The fourth phase of the Model included a process of ensuring that the owner had the proper financial base and documentation in place to ensure a smooth transition and successful exit.

As Mr. Erickson applied the principles of the Model to a growing number of businesses the need for teaching change management principles became more apparent. Most people, especially those in an ownership or executive management position understand the difficulty that change brings to any organization. The concept of resistance to change is all too apparent anytime an organization goes through change. Mr. Erickson used his corporate experiences in having led change efforts in large and medium sized companies and the knowledge gained through a formal post graduate business education to expand on the processes he used in the Model. The Model is the forerunner of the BOP.

---

Business Optimization – Current Position

The BOP is a corporate focused training program that effectively creates change throughout a company. One of the problems many companies have with their current training programs are they tend to focus on improving one area with the idea that if that area is improved the whole company should improve. Often company leadership believes the key problem lies in one area when in fact it may lie in a different area. When this happens, the effect from the training efforts are diminished and results in little to no real improvement in the overall performance of the company.

There are two prevalent reasons training efforts fail. These reasons are that the focus is on the wrong area and the training itself involves a limited number of employees. Owners who want to see improvement in the overall performance of their companies need to implement training processes that address the company as a whole and that are deigned to find and correct the right area. The BOP is designed to do just that.

As explained in the previous section the BOP has its roots in the Model. It is an improvement process that starts at the top of an organization and systematically focuses the entire organization on solving the one issue that is most limiting the performance of a company. In this way the whole organization is involved at different levels and each person involved learns the improvement process as it applies to their function within the company. It is a way to focus everyone’s efforts on solving the most critical problem. This approach puts everyone in the same boat and rowing in the same direction.

In the fast-pace world of competitive businesses it is becoming harder to find ways to effectively increase revenues and profits. It is becoming increasingly important that companies find ways to increase their performance while achieving a quick return on every training dollar they spend. It is also becoming increasingly important that companies create a working environment that is conducive to employee retention.

The BOP is designed to guide a company through the process of effectively implementing change. It is a process that involves employees from just about every job level beginning with the Owner and working its way through management, supervision and the rank and file employees.

The reason the BOP is effective is in the way it integrates the management concepts of Systems Theory and Thinking, the Theory of Constraints and Transformational Leadership. The BOP intertwines these established concepts into a process that focuses the resources of a company to achieving a single goal. This goal is finding and fixing the problem that is most limiting or constraining a company from improving its performance. Using this approach allows the focus to systematically funnel down to those who have the greatest impact on solving this problem.

The BOP by its nature able to help create significant changes in the way a company performs without creating a lot resistance to change companies often experience. Dealing with resistance to change can end up being expensive in the form of lost production and increased human resource and management issues, not to mention delays in achieving the benefits realized when the change is fully implemented.

Owners are also looking for ways to create significant improvements while minimizing disruption caused by people who are not cooperative or supportive of the change process or where working on the wrong problems or making the wrong decisions end up actually hurting the performance of a company rather than improving it.

The BOP is also a process that engages the employees in a way that reduces employee issues while creating skilled teams of employees that effectively and continually improve the company. This makes it easier to hire and retain employees, which reduces turnover. Reduced turnover has a direct impact on future training costs and a company’s ability to compete in today’s world of growing economies and opportunities. The BOP is a process that once learned can be repeated over and over again. It is an ongoing process that allows companies to rapidly identify and solve the current problem that is most constraining or limiting its ability to continually improve. The BOP gives companies an unsurpassed way to accelerate their performance, which can give them a competitive edge in today’s marketplace.

---

Business Optimization – Future Outlook

As competition increases it is going to become more important to increase the way organizations approach employee skill enhancement and organizational effectiveness. It is also going to be more difficult for business owners to find the time and resources to implement effective training that improves overall organizational effectiveness. On top of these two challenges many business owners do not know where to begin if they want to improve organizational effectiveness. These are what the BOP is designed to solve. This process is a comprehensive learning system that involves the whole company in a way that focuses the entire organization in improving business performance and giving it the ability to achieve more profits and top line revenue.

Loyalty of employees toward their employers and employers toward their employees seems to be waning. This is happening at the same time that competition for skilled employees is on the rise. Companies not only need skilled workers they also need organizational effectiveness to ensure that every worker is contributing to the goals and objectives of the company. Companies are facing growing competition while at the same time it is becoming more difficult for the consumer to differentiate between competing products and services. This means that a company’s organizational effectiveness will become increasingly important in determining its competitive advantage.

As we move into the future, corporate training will need to be increasingly focused on moving the whole organization toward achieving its goals. It will also become increasingly important to include and solicit participation from all employees from the top executives to line employees. One of the challenges will be to accomplish this type of training with minimal to no disruption of existing business requirements.

It will become increasingly important that future corporate training involves the whole organization beginning with articulated goals that are established at the top. The goals must be apparent to everyone throughout the organization and must drive the training focus. In order to have a positive effect on the whole organization, and thus improve overall performance, corporate training must be geared to the whole company, not just a few individuals.

The old saying, “the more things change, the more they stay the same”, will continue to be true. Regardless of the growth in technology, companies still need to operate using time-tested principals. These time-tested principals include the role of leadership in providing direction to an organization, the importance of teams in organizational effectiveness and the need for people to have the necessary skills while feeling they are important as individuals.

The BOP is ideal for those companies who need to improve their overall organizational effectiveness. Because the process systematically works its way down through a company it aligns everyone in contributing toward reaching corporate goals. It helps owners develop, quantify and articulate goals. It helps develop varying leadership skills with individual throughout the organization. It creates synergy among employees by developing effective team work at all levels. As a result it develops effective and efficient organizations, and it does this in a systematic way that creates little to no disruption, nor adds undue burden to any employee, from the top of the organization to the bottom.

As competitive pressure increases companies will continue to need to improve their marketing, human resource and technical skills. There are many types of training programs designed to help companies in these areas. However, it will become increasingly important for companies to also improve their overall organization effective and skills, beginning at the top and including everyone within the organization. The solution to improving this organizational effectiveness will be significantly helped by processes like the BOP.

---

Curriculum

Business Optimization – Part 1- Year 1

1. Part 1 Month 1 Getting Started
2. Part 1 Month 2 Second Step
3. Part 1 Month 3 Leadership Team
4. Part 1 Month 4 Team Goals
5. Part 1 Month 5 Team KPIs
6. Part 1 Month 6 Company Workflow
7. Part 1 Month 7 Management Team
8. Part 1 Month 8 Department KPIs
9. Part 1 Month 9 Throughput Analysis
10. Part 1 Month 10 Project Team
11. Part 1 Month 11 Team Development
12. Part 1 Month 12 Departmental Workflow

---

Business Optimization – Part 2- Year 2

1. Part 2 Month 1 Department Metrics
2. Part 2 Month 2 Problem Solving
3. Part 2 Month 3 Communicating Goals
4. Part 2 Month 4 Identifying Constraints
5. Part 2 Month 5 Process Mapping
6. Part 2 Month 6 Process Metrics
7. Part 2 Month 7 Process Improvement
8. Part 2 Month 8 Impact Analysis
9. Part 2 Month 9 Improvement Implementation
10. Part 2 Month 10 Measuring Results
11. Part 2 Month 11 Reporting Results
12. Part 2 Month 12 Executive Review

---

Program Objectives

The following list represents the Key Program Objectives (KPO) for the Appleton Greene Business Optimization corporate training program.

Business Optimization – Year 1

1. Part 1 Month 1 Getting Started The top executive or Owner and his or her senior staff are the participants of this and the next two modules. The objectives are for the participants to gain an overall understanding of the Business Optimization Process referred to as the BOP and to take the initial steps in the implementation of the BOP. The initial step is leaning that BOP is mission driven. It is a corporate focused, team building process that teaches the skills needed to effectively improve an organization’s performance. It accomplishes this by training employees to systematically identify and solve the root cause of the problem that is most constraining the performance of the organization. It is a continuous improvement process that once implemented results in a higher level of satisfied customers and a more enjoyable work environment for the employees. These results lead to a financially stronger organization that brings long-term stability and better rewards and job security for everyone. The BOP integrates the principles of Systems Theory and Thinking, the Theory of Constraints, and Transformational Leadership. The participants will develop the mission and vision statements for the BOP. The mission statement clarifies the purpose of the BOP and provides direction for the organization during the implementation of the BOP. The vision statement shows what the company looks like after the mission is accomplished and inspires and challenges people to accomplish the mission. Anytime there is a companywide focus it is imperative that the Owner be the driver behind the effort. This can be scary and daunting to an Owner who already has more work on his or her plate than they can get done and who sees an organization that is in the same boat. Having a corporate focus is extremely important if a company is to see ongoing, sustainable growth. It is also important that this effort be planned and implemented in a way that does not disrupt the critical components of the ongoing business. The participants will gain a basic understanding of Systems Theory and Thinking and how it applies to their organization. Organizations are systems and as such adhere to certain laws, characteristics and principles that when understood make organizational change efforts less stressful and disruptive and more successful in the end.
2. Part 1 Month 2 Second Step
   The objectives are to have the participants set goals and strategies for the BOP and to learn the second principle of the BOP, the Theory of Constraints (ToC). The ToC is a systematic method using the laws, characteristics and principles of System Theory and Thinking to lead an organization through a problem solving process. This process helps employees effectively find the root cause of the problem that is most constraining the throughput of an organization. The mission for the BOP was determined during the first module. During this second module the participants determine the cash flow required to achieve the mission. In order to produce a given level of cash flow a company must achieve a certain level of throughput. Throughput is the amount of products or services a company can efficiently produce and deliver to a client in a specific period of time. Once the level of throughput is determined strategies to achieve this throughput need to be developed. Often goals are throttled back because of perceived throughput limitations that set artificially low ceilings that Owners accept. They accept these ceilings because they are unsure how to effectively raise them. The focus of ToC is on improving overall throughput of a company. ToC starts with the premise that the goal of every company is to make money. Historically, companies have more often than not concentrated on reducing costs to make more money. Though controlling costs is obviously important it is always a short term focus and often ineffective in creating long term improvement. Without increasing throughput, improvement is eventually limited by the amount of costs that can be reduced. The ToC aligns the whole organization to focus on company goals and improving key areas to achieve these goals. ToC is designed to not only improve the bottom line but to create a culture of cooperation and the creative energy needed to reverse entropy and overcome inertia which are inherent in any system. In almost all cases owners want is to maximize company profits in ways that benefit not only themselves but their employees, customers and vendors, and the local community to which they belong. Along with maximizing profits, most owners want to improve employee morale, reduce management stress, increase leadership throughout an organization, reduce overhead, and improve customer relations and retention. ToC accomplishes the above by harnessing every employee’s abilities in a synergistic way that accelerates a company’s performance. The results from implementing the BOP approach are not only improved business capacity and performance but improved worker loyalty, skill sets, productivity and satisfaction.
3. Part 1 Month 3 Leadership Team
   The objectives of this module are for the participants to establish the Leadership Team and to learn the principle of Transformational Leadership. Not only is the application of Systems Theory and Thinking and the ToC essential to effectively improving company performance, so is leadership. Therefore, the third step in learning about the BOP is the need to develop transformational leadership skills in people throughout your company starting with the participants of this module. Transformational leadership is where the leader first creates a vision that is used to drive the organization forward. In order for the vision to drive the organization the leader must share it with his or her followers and the followers must understand and buy into it. The leader then helps his or her followers identify what needs to change in order to achieve the vision. This leadership style uses the vision as the starting point to inspire followers. This vision creates the energy and commitment among the followers to implement the required change. The BOP trains various employees throughout a company on leadership principles and skills. These individuals apply these principles and skills as they lead the various teams that are formed to implement the required changes. During the first module the Owner and his or her senior staff developed the mission for the BOP and the vision of what it looks like when the mission is accomplished. The participants learned Systems Theory and Thinking and how its laws, characteristics and principles apply to their company. During the second module the same participants determined the cash flow and throughput levels required to achieve the mission and set strategies to accomplish these levels. The participants learned the concepts of the ToC and how Systems Theory and Thinking is integrated with the tools of the ToC to create the change necessary to accomplish the mission. During this third module the Owner and his or her senior staff will integrate what they learned about Systems Theory and Thinking and ToC with the principles of Transformational Leadership in order to have a foundational understanding of the BOP. At the end of the module the Owner will select participants for the Leadership Team of which he or she is the team leader.
4. Part 1 Month 4 Team Goals
   The objectives of this module are for the members of the Leadership Team to define the team’s role and goals. The roles will be defined so as to not be overly burdensome on the members of the Leadership Team or on the organization as a whole. The result will be an understanding of the Leadership Team’s purpose or charter, the BOP, team goals and responsibilities, and how team members work with each other. This includes establishing communication protocols by determining the frequency and structure of meetings, participants in these meetings, format for the communicating progress, etc. Another important aspect is determining the level of commitment from the members of the Leadership Team. The members of the team will jointly decide the goals for the team, which will align with the mission, goals and strategies established in the previous three modules. There needs to be open dialog between team members. Team members must be able to give input in establishing team goals, ask questions as to the reason behind a given goal and thoroughly discuss any goals or issues that are not clear. The goals must be “SMART” (Specific, Measureable, Attainable, Relevant and Trackable) and each member must agree that each goal meets these criteria. The members of the Leadership Team must get to the point where everyone agrees and commits to these criteria. If someone cannot do this the goal in question is further discussed until a resolution is determined. If a member simply cannot agree and is at odds with the rest of the team that person should be removed from the team and replaced if needed. After the goals are finalized the expected results will be quantified so that each goal has a measureable outcome. Each goal is then documented in such a way as it can be shared with appropriate personnel within the organization. In order for a business to be “firing on all eight cylinders” the flow of work through the organization must be in balance and capable of meeting the company’s objectives. Accomplishing this requires a company wide effort all focused on the same objectives. The Owner’s job is to ensure that this happens. The team provides management oversight and takes the responsibility for ensuring that the mission drives the BOP.
5. Part 1 Month 5 Team KPIs
   The objective of this module is for the Leadership Team to learn about Key Success Drivers or KSDs and Key Performance Indicators or KPIs. KSDs are those few activities that are critical for achieving the results desired. If these activities do not happen you will not accomplish the mission. A KPI is a metric that measures the results of these key success drivers in a way that quickly communicates how a company is performing against meeting its mission objectives. Even though there are multiple activities associated with operating any company only a few of them are critical. The rest may be useful but if not performed properly will not affect achieving the mission. The Leadership Team learns how to determine, measure, and use KPIs. Properly defined KPIs help align the whole organization. This means that each area within the organization is focused on those activities whose results are reflected in the KPIs. Since these KPIs represent how a company is performing, the information gathered from each department should tie into these KPIs. A properly defined KPI provides the type of information that can act as an early warning indicator if something within the organization is drifting away from producing the value desired. It helps keep people throughout the organization focused and accountable for accomplishing their part in supporting the company. Each area and person in a company is thereby focused on those tasks that help the company accomplish its mission. Once the KPIs are established, company performance against each KSD is documented, establishing a baseline against which future performance is measured. This allows top management to see the ongoing improvements made and the impact of these improvements on the whole organization. These measurements also give an early indication if some of the activities need to be adjusted in order to keep progress on track.
6. Part 1 Month 6 Company Workflow
   The objective of this module is for the Leadership Team to learn to map the flow of work as it passes through the company at the departmental level. Once they know how to map the flow of work they will learn to use this map to identify which department contains the most critical bottleneck that currently limits the company’s ability to effectively increase its business volume. The overriding reason behind the BOP is to ensure that the right problems are worked on and resolved. All too often companies spend their time fixing problems that end up not impacting the goals of the organization. To effectively begin to identify which problems need to be fixed the Leadership Team must first understand the way business flows through the company on a department by department, or function by function basis. Defining the Company Workflow involves creating a visible flowchart that identifies the major areas or functions within the company through which the company’s products or services flow. These major areas or functions are basically defined as the areas involved in finding the work (Sales), producing the work (Operations), distributing and delivering the work (Distribution), and funding the work (Finance). They can also include areas such as Product Development, Estimating, Logistics, etc. depending on the size of the areas and where they are within the company organization. The requirements in each area must be driven by the mission for the BOP. This module is called Company Workflow because it looks at the major areas or departments of a company and depicts how they relate to each other as work flows through the company. The responsibility for creating this map falls to the Leadership Team because its members are more able to see the big picture without being drawn down into departmental minutia. In other words, they are more able to see the forest and not all the individual trees. The trees will become apparent as the process works its way down through the organization. The Leadership Team will learn how to establish and draw this workflow map by looking at how value is added within and between each of the major areas or departments of the business. The members will then learn to identify the amount of work or business capacity of each department. The department with the lowest business capacity is considered the “constraining” department.
7. Part 1 Month 7 Management Team
   The objectives of this module are for the Leadership Team to learn the process of forming a management team and to make sure that the members of the Management Team understand their roles, expectations, responsibilities and goals. The purpose of the Management Team is to carry out the directives of the Leadership Team. It is the second management layer in the organization and is comprised of key managers who are one level below the members of the Leadership Team. The Management Team is responsible for understanding the business process and how each department contributes to helping the company achieve its mission. They are responsible for directing a focused effort needed to determine the key areas within the constraining department that is preventing the company from achieving its goals. This team will be responsible for directing future problem identification and solving efforts. The Process will guide the Leadership Team as it forms this Management Team. The Leadership and Management Teams will learn how to determine the role of and goals for the Management Team. The result will be an understanding of the Management Team’s purpose or charter, the BOP, team goals and responsibilities, and how team members will work with each other. This will include establishing communication protocols between the Leadership and Management Teams. This will include determining the frequency and structure of meetings, participants in these meetings, format for communicating progress, etc. Another important aspect is determining the level of commitment from members of the Management Team. The Management Team will learn how the Leadership Team identified the business capacity of the constraining department and together the two teams will establish what the capacity should be if the company is to reach its goals. The Management Team will learn how to assess the impact of increasing the capacity of the constraining department. They will learn how to determine their options based on their assessments. The members of the team will better understand how the constraining department functions and what things impact the performance of the department.
8. Part 1 Month 8 Department KPIs
   The objective of this module is for the Management Team to learn how to determine and apply KPIs for each department in order to align each department with company goals. For the same reason that the company determined its KPIs, each department must have its own set of KPIs that feed into the company’s. The same basic process used to establish the company KPIs is used here. The Management Team takes the lead, with input from the Leadership Team, and is responsible for establishing each department’s KPIs. One of the problems many companies face is that individual departments have their own set of performance measurements that do not necessarily align with the overall direction of the company. As an example, the corporate focus may be on achieving targeted gross profits or margins on its sales, where the sales department is focused on hitting certain sales numbers regardless of the gross profit generated by the revenue. As with company KPIs, departmental KPIs are no more than a dozen indicators that communicate to the department manager how his or her department is doing in contributing to the company’s strategic goals and direction. The Management Team with assistance from each department manager determines and documents the current performance or baseline of each department against the departments KPIs. This is necessary so improvements can be measured. Another reason for measuring the performance of a given department against its KPIs is to provide more of a business mindset among the department managers. Often, department managers are disconnected from the overall business goals of the Owner. Department managers can have a myopic view of the business because their focus is on their department’s performance and hitting the goals established for their department. They tend to have little understanding of what is and is not important to the overall business since their focus is only on their department. Looking at the performance of a department with KPIs that are aligned with company KPIs is often a change in thinking for a department manager. A manager who prides him or herself for performing well against previous expectations may resist or feel threatened when expectations change. Change must be managed so people do not perceive they are being punished when the rules shift. A lot of communication and discussions with each department manager must take place. These managers must be involved in helping determine the changes required within their department.
9. Part 1 Month 9 Throughput Analysis
   There are three objectives for this module. The first is to for the members of the Management Team to learn how to use a workflow map to more fully understand the flow of business and be able to apply this knowledge to develop a future, more detailed workflow map. The second is for them to understand the maximum effective business capacity each department can handle in line with company goals. The third is for them to begin learning to work amongst themselves as they dialog and define the business capacity in each department without becoming defensive or antagonistic. Instead, they will begin to learn how to work together as a synergistic team with the focus on achieving the overall goals and objectives of the company. During this step in the process the Management Team takes the Company Workflow map that the Leadership Team completed in Part 1 Month 6 and verifies their assumptions by determining the amount of business each department can handle. This is based on the maximum business, in revenue dollars that each department can effectively handle without making any capital investment. Direct costs are not considered capital investment. In other words, if a department would only need to hire direct labor or purchase more materials in order to produce more products or services, then it is not restricted in its capacity at this point. However, if adding more direct labor or materials would not allow a department to increase its throughput then the department is at capacity and this capacity becomes limiting. The result of this module will be a more thorough understanding by members of the Management Team for how work flows through the company and the general location of the most significant constraint that is limiting the business capacity of the company.
10. Part 1 Month 10 Project Team
    The objectives of this module are for the Management Team to apply the process of creating a Project Team and to make sure that the members of the Project Team understand their roles, expectations, responsibilities and goals. This team is the third layer in the BOP and is comprised of the employees who have the most intimate knowledge of the way the constraining department operates. The purpose of the Project Team is to verify the constraining point in the constraining department and then develop and implement solutions that will improve the throughput at this particular point. The Management Team will be guided as it forms this Project Team and will apply what it learned when their team was formed. The Management and Project Team will determine the role and goals of the Project Team. The result will be an understanding of the Project Team’s purpose or charter, the BOP, team goals and responsibilities, and how team members will work with each other. This will include establishing communication protocols between the Management and the Project Teams. It will include determining the frequency and structure of meetings, participants in these meetings, format for the communicating progress, etc. Another important aspect is to determine the level of commitment from members of the Project Team. The Project Team will learn how the Management Team identified the constraint within the constraining department and together the two teams learn how they will establish potential solutions to increase the throughput at the constraining point. They will also learn how to assess the impact of increasing the capacity of the constraining department. They will learn how to determine their options based on their assessments. Going through this module will help members of the team better understand how this department functions and what things impact the performance of the department. The outcome of this module is for the Project Team to identify the most prominent bottleneck within the constraining department. Once this is accomplished it is time to burrow down into the bottleneck.
11. Part 1 Month 11 Team Development
    The objective of this module is for the Project Team to learn how to function as an effective synergistic team. This will be accomplished with basic team development training techniques and will include involvement of the Management Team. Now that the ground work is set and before the Project Team starts focusing on how to increase the throughput of the department it is important that members of the team first know and buy in to the team’s charter. This is critical and the first step if the members of the team are to all pull in the same direction. There must be buy-in and public commitment to this charter by each team member. Any member that does not buy in to the charter must be replaced by someone who does. Once all members understand and have committed to the charter, team rules need to be clarified. These rules will establish the process by which problems are identified, decisions are made, disagreements are resolved, changes are implemented, and performance against benchmarks are tracked and communicated. In short, the objective of this module is to ensure that the Project Team becomes an effective, synergistic team that accomplishes the goals set by the Management Team. This training will also include a deeper look at the communication protocols established in the previous module. Well defined and developed communication protocol and rules reinforce the teams focus and ensures that each member of the team is fully engaged and supporting the direction established earlier. Participants will learn what constitutes effective communications. Having good protocols and rules makes it almost as easy to address negative issues as it is to address positive ones. Difficult problems that could cause the team to be in jeopardy of missing a benchmark can be addressed head-on in a way that pulls the team together in a problem solving attitude as opposed to ignoring these types of issues. Significant issues that contribute to why teams fail often boil down to how disagreements are handled, the clarity of roles and duties, and the way dissenting members communicate and discuss the reason behind their dissent. People withhold critical information because either they do not understand the criticalness of the information, do not feel it is their responsibility to communicate, afraid of “stepping on toes” or simply afraid of the potential repercussions (i.e. “shooting the messenger”). It is important that the members have a thorough understanding of what is expected of them. These individuals will be the closest to the problem and will have the greatest impact on solving the problem. Therefore, it is important that they learn about team dynamics and how to create a supportive and synergistic team environment.
12. Part 1 Month 12 Departmental Workflow
    The objective of this module is for the Project Team with input from the Management Team to learn how to develop a visible detailed workflow map of the constraining department. The map will depict all operations within the department and how they are interconnected. Now that the Project Team has been established it is time to burrow down into this department to determine the most prevalent bottleneck that limits the amount of work that can flow through this department. Similar steps that were taken to produce the Company Workflow map are now used to develop a more detailed workflow that looks at each operational step with the constraining department. This is a critical step in understanding more fully how business flows through this department. The responsibility for creating this workflow map belongs to the Project Team. They are closer and more able to see the right level of detail that would be missed by the Management Team. The Project Team learns how to establish and draw a more detailed workflow map by looking at how the key processes within this department are connected. This begins by looking at the point work leaves the department and working backwards through the department to the point that it receives the work from the previous department. As an example, the department produces a widget and sends it to the finished goods warehouse. Prior to this step the widget has to be assembled which cannot happen until the raw material warehouse delivers the components necessary to produce the widget, which is the preceding department in this workflow. A widget can be a step in producing a material product or a step in providing a service. Regardless, each step within a company should add increasing value to the finished product or service while not hindering the company’s output capacity.

---

Business Optimization – Year 2

1. Part 2 Month 1 Department Metrics
   The objective of this module is for the Management and Project Teams to learn how to determine and establish the types of metrics that will be used to track progress toward reaching the goal of the BOP within the department. Proper metrics and visibility of these metrics not only help keep the departmental organization focused, but also provide the ability to quickly identify when the results begin to deviate from a goal. This gives the people the opportunity to make timely corrective action to ensure that the program stays on track. There are three levels of metrics. The first is measuring the activities of team participants to make sure that everyone is doing what they are assigned to do. The second is measuring the outcome of these activities. The third is ensuring that these activities produce results that align with company goals and that are reflected in company and department KPIs. The team will learn and apply rules that are used to develop effective metrics. They will learn and apply hierarchical metrics that involve the above three areas and that communicate progress to department and to upper management. Once metrics are established it is important to document how the various operations within the department are performing against each metric. Improvements can then be quantified as the department moves through the BOP. This is necessary so that improvements from current performance levels can be documented. Each metric is to be validated to determine if it reflects the KPIs of the department. It is up to the Project Team to ensure that departmental metrics feed into the company KPIs. Aligning operational steps with key metrics often creates significant changes within a department. This change, if not implemented correctly can cause stress and negative energy within a group of people. It is important that these changes be conducted in a positive and non-threatening manner. A group of employees that prides itself on performing well against previous expectations may resist or feel threatened when expectations change. Again, as with the department managers, change must be managed and people must not perceive that they are being punished when the rules shift. A lot of communication and discussions with the employees must take place and they must be involved in determining how they can move their operation from where it is to where it needs to be based on the new or modified metrics.
2. Part 2 Month 2 Problem Solving
   The main objective of this module is for the Project Team to learn team problem solving techniques. The Management Team is involved at some level so they gain an understanding of the approach the Project Team will be taking. A secondary, yet vitally important objective is to use the process of teaching problem solving to reinforce what the Project Team learned in Part 1 Month 11 on team dynamics and to reinforce the rules under which the Project Team will operate. Fundamental to solving any problem is to identify where the problem first becomes apparent and then systematically work through the effects of the problem until the root cause is discovered. Until the root cause is discovered all efforts to solve the problem will simply cover up symptoms and the effects of the problem will never go away. To effectively solve any problem the root cause must be identified and eliminated. This is accomplished by making a list of potential causes then systematically going through each potential cause to evaluate its impact. The cause that seems to have the biggest negative impact will become the focus of the change. The next step is to make a list of potential solutions and then systematically evaluate each potential solution to determine if it will correct the root cause. The third step is to evaluate how to apply this change in a way that does not disrupt critical functions during the change process. The fourth step is to evaluate the potential results to determine if there will be any undesirable effects from the change. This thinking process is circular until the team is convinced that the selected change will eliminate the root cause without creating more problems than it solves.
3. Part 2 Month 3 Communicating Goals
   The objective of this module is for the Project Team to learn how to articulate its goals and associated metrics in a positive and understandable way and communicate this information to the people impacted by the changes. It is also intended to explain the BOP process, the role of the Project Team and how various employees could be involved. The Project Team will outline the BOP and their team charter structured in a way that speaks to the employees within the de